Ethereum recorded the largest validator exit in history this week, with over 2.4 million Ether worth more than $10 billion waiting to be withdrawn from its proof-of-stake network. However, institutional participants are stepping in, investing billions into the validator entry queue.
The Ethereum exit queue surpassed 2.4 million ETH on Wednesday, valued at over $10 billion. The surge in exits has extended the validator queue time to over 41 days and 21 hours, according to blockchain data from ValidatorQueue.com.
Validators are responsible for adding new blocks and verifying transactions on the Ethereum network, playing a crucial role in its operation.
The spike in pending withdrawals has reignited concerns about potential selling pressure from Ether holders.
While this does not mean all validators are looking to cash out, considering that the price of Ether has risen by 83% over the past year according to the Cointelegraph price index, a significant portion of the $10 billion may be sold.
Adding to the concerns of selling pressure is the fact that the validator exit queue is about five times larger than the Ethereum entry queue, which currently holds over 490,000 Ether waiting to be staked, with a wait time of 8 days and 12 hours.
Although short-term concerns about selling pressure persist, the $10 billion in withdrawals does not threaten the stability of the Ethereum network, which still has over 1 million active validators staking 35.6 million Ether, accounting for 29.4% of the total supply.
This development comes a day after Grayscale staked $150 million in Ether on Tuesday. The cryptocurrency-focused asset management firm introduced staking capabilities for its Ether exchange-traded product, becoming the first U.S. cryptocurrency fund issuer to offer passive income based on staking for its fund.
On Wednesday, Grayscale deposited another 272,000 Ether into the staking queue, valued at $1.21 billion, indicating that the company accounts for "the majority of the coins currently waiting for staking activation," according to on-chain analyst EmberCN.
Despite the surge in validator exits, the momentum for Ether continues to be driven by institutional inflows through exchange-traded funds (ETFs) and corporate treasuries, as digital asset platform Nexo's research analyst Iliya Kalchev told Cointelegraph:
He added, "The data reflects Ethereum's evolution into a yield-bearing, institutionally recognized asset, used for both infrastructure and collateral purposes."
Related: Grayscale stakes $150 million in Ether (ETH), industry focuses on altcoin ETP approval wave
Original article: “Ethereum (ETH) exit queue grows to a record $10 billion, institutional funds flood in to hedge against selling pressure”
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